SusGlobal Energy Corp.: Exhibit 10.1 - Filed by newsfilecorp.com






SCHEDULE “H” 
SUSGLOBAL ENERGY CORP.

(the "Company") 
STOCK OPTION PLAN

1. PURPOSE OF THE PLAN 

The Company hereby establishes a stock option plan for
Directors, Employees and Consultants (as such terms are defined below) of the
Company and its subsidiaries, to be known as the "SUSGLOBAL ENERGY CORP. Stock
Option Plan" (the "Plan") or such other name as may be approved from time to
time by the Board of Directors of the Company. The purpose of the Plan is to
give to Directors, Employees and Consultants, as additional compensation the
opportunity to participate in the profitability of the Company by granting to
such individuals options, exercisable over periods of up to five years as an
incentive and determined by the Board of Directors of the Company, to buy shares
of the Company at a price equal to the Market Price (as defined below)
prevailing on the Board of Directors of the Company and as permitted by the
policies of the Exchange (as defined below).

2. DEFINITIONS 

In this Plan, the following terms shall have the following
meanings:

(a) "Affiliate" means an affiliate within the meaning of the
Business Corporations Act (Ontario). 

(b) "Associate" means an associate as defined in the Securities
Act.

(c) "Board" or "Board of Directors" means the Board of
Directors of the Company.

(d) "Change of Control" means the acquisition by any person or
by two or more persons, acting jointly or in concert (within the meaning of the
Securities Act) of the Company, which when added to all other voting securities
of the Company at the time held by such person or by such persons, totals for
the first time not less than fifty percent (50%) of the outstanding voting
securities of the Company, which, when added to all other voting securities of
the Company at the time held by such person or by such persons, totals for the
first time not less than fifty percent (50%) of the outstanding voting
securities of the Company or the votes attached to those securities are
sufficient, if exercised, to elect a majority of the Board of Directors of the
Company.

(e) "Consultant" means, in relation to the Company, an
individual (or company wholly-owned by an individual) who: 

(i) provides ongoing consulting services to the Company or an
Affiliate of the Company under a written contract;

(ii) possesses technical, business or management expertise of
value to the Company or an Affiliate of the Company;




(iii) spends a significant amount of time and attention on the
business and affairs of the Company or an Affiliate of the Company; and

(iv) has a relationship with the Company or an Affiliate of the
Company that enables the individual to be knowledgeable about the business and
affairs of the Company.

(f) "Company" means SUSGLOBAL ENERGY CORP. and its
successors.

(g) "Directors “means directors, senior officers and Management
Company Employees of the Company or of the Company's subsidiaries to whom stock
options can be granted in reliance on a prospectus exemption under applicable
securities laws.

(h) "Disability" means any disability with respect to an
Optionee which the Board, in its sole and unfettered discretion, considers
likely to prevent permanently the Optionee from: 

(i) being employed or engaged by the Company, its subsidiaries
or another employer, in a position the same as or similar to that in which such
Optionee was last employed or engaged by the Company or its subsidiaries; or


(ii) acting as a director or officer of the Company or its
subsidiaries.

(i) "Discounted Market Price" of Shares means, if the Shares
are listed on the Exchange, the Market Price less the maximum discount permitted
under the policies of the Exchange applicable to Options.

(j) "Employee" means:

(i) an individual who is considered an employee of the Company
or a subsidiary of the Company under the Income Tax Act (Canada) (i.e.
for whom income tax, employment insurance and CPP deductions must be made at
source); 

(ii) an individual who works full-time for the Company or a
subsidiary of the Company providing services normally provided by an employee
and who is subject to the same control and direction over the details and
methods of work as an employee of the company or a subsidiary of the Company,
but for whom income tax deductions are not made at source; or 

(iii) an individual who works for the Company or a subsidiary
of the Company on a continuing and regular basis for a minimum amount of time
per week providing services normally provided by an employee and who is subject
to the same control and direction by the Company or a subsidiary of the Company
over the details and methods of work as an employee of the Company, or a
subsidiary of the Company but for whom income tax deductions are not made at
source.

(k) "Exchange" means the TSX Venture Exchange or, if
applicable, The Toronto Stock Exchange or any other stock exchange on which the
Shares are listed and posted for trading.

(l) "Expiry Date" means the date set by the Board under section
3.1 of the Plan, as the last date on which an Option may be exercised.

(m) "Grant Date" means the date on which an Option is granted
by the Board. 

(n) "Insider" means: 

(i) a director or senior officer of the Company;




(ii) a director or senior officer of a company that is an
Insider or a subsidiary of the Company; or;

(iii) a person that beneficially owns or controls, directly or
indirectly, voting shares of the Company carrying more than 10% of the voting
rights attached to all outstanding voting shares of the Company.

(o) "Investor Relations Activities" means investor relations
activities as defined in the rules and policies of the Exchange.

(p) "Management Company Employee" means an individual employed
by a Person providing management services to the Company, which are required for
the ongoing successful operation of the business enterprise of the company, but
excluding a Person engaged in Investor Relations Activities. "Management Company
Employees" are included in the definition of "Directors". 

(q) "Market Price" of Shares at any Grant Date means, the
closing price per Share on the Exchange for the last day Shares were traded
prior to the Grant Date, provided such price is fixed in accordance with and
subject to the policies of the Exchange, or if the Shares are not listed on any
stock exchange, "Market Price" of Shares means the price per Share on the
over-the-counter market determined by dividing the aggregate sales price of the
Shares sold by the total number of such Shares so sold on the applicable market
for the last day prior to the Grant Date.

(r) "Options" means an option to purchase Shares granted
pursuant to this Plan.

(s) "Option Agreement" means an agreement, between the Company
and an Optionee. 

(t) "Optionee" means each of the Directors, Employees and
Consultants granted an Option pursuant to this Plan and their heirs, executors
and administrators and, subject to the policies of the Exchange, an "Optionee"
may also be a corporation wholly-owned by an individual eligible for an Option
grant pursuant to this Plan.

(u) "Option Price" means the price per Share specified in an
Option Agreement, adjusted from time to time in accordance with the provisions
of section 5.

(v) "Option Shares" means the aggregate number of Shares which
an Optionee may purchase under an Option.

(w) "Person" means an individual, corporation, incorporated
association or organization, corporate body, partnership, trust, association or
other entity.

(x) "Plan" means this SUSGLOBAL ENERGY CORP. Stock Option
Plan.

(y) "Shares" means the common shares in the capital of the
Company as constituted on the Grant Date provided that, in the event of any
adjustment pursuant to section 5, "Shares" shall thereafter mean the shares or
other property resulting from the events giving rise to the adjustment.

(z) "Securities Act" means the Securities Act (Ontario),
R.S.O. 1990, c.S.5, as amended, as at the date hereof.

(aa) "Unissued Option Shares" means the number of Shares, at a
particular time, which has been allotted for issuance upon the exercise of an
Option but which have not been issued, as adjusted from time to time in accordance with the provisions of section
5, such adjustments to be cumulative.





(bb) "Vested" means that an Option has become exercisable in
respect of a number of Option Shares by the Optionee pursuant to the terms of
the Options Agreement.

3. GRANT OF OPTIONS 

3.1 Option Terms 

The Board may from time to time authorize the issue of Options
to the Directors, Employees and Consultants of the Company and its subsidiaries.
The Option Price under each Option shall be not less than the Discounted Market
Price on the Grant Date. The Expiry Date for each Option shall be set by the
Board at the time of issue of the Option and shall not be more than five years
after the Grant Date. Options shall not be assignable (or transferable) by the
Optionee. 

3.2 Limits on Shares Issuable on Exercise of Options


The maximum number of Shares which may be issuable pursuant to
options granted under the Plan shall be 2,000,000 Shares or such additional
amount as may be approved from time to time by the shareholders of the Company.
The aggregate number of Shares that may be reserved for issuance to any one
individual under the Plan and under all of the Company's other previously
established or proposed share compensation arrangements shall not exceed 5% of
the total number of issued and outstanding Shares on a non-diluted basis at time
of the grant. The aggregate number of Shares that may be reserved for issuance
to Consultants under the Plan and under all the Company's other previously
established or proposed share compensation arrangements shall not exceed 2% of
the total number of issued and outstanding Shares on a non-diluted basis at the
time of the grant. The aggregate number of Shares which may be reserved for
issuance to persons employed in Investor Relations Activities under the Plan and
under all of the Company's other previously established or proposed share
compensation arrangements shall not exceed 2% of the total number of issued and
outstanding Shares on a non-diluted basis at the time of the grant, unless the
Exchange permits otherwise. The number of Shares which may be reserved for
issuance under the Plan and under all the Company's other previously established
or proposed share compensation arrangements (a) in the aggregate shall not
exceed 10% of the outstanding issue of Shares; and (b) to any one Optionee
within a one year period shall not exceed 5% of the outstanding issues of
Shares.

For the purposes of subsections (a) and (b) above, "outstanding
issue" is determined on the basis of the number of Shares that are outstanding
immediately prior to the Share reservation in question; excluding Shares issued
pursuant to Share compensation arrangements over the preceding one-year
period.




3.3 Option Agreements 

Each Option shall be confirmed by the execution of an Option
Agreement. Each Optionee shall have the option to purchase from the Company the
Option Shares at the time and in the manner set out in the Plan and in the
Option Agreement applicable to that Optionee. The execution of an Option
Agreement shall constitute conclusive evidence that it has been completed in
compliance with this Plan.

4. EXERCISE OF OPTION 

4.1 When Options May be Exercised 

Subject to sections 4.3 and 4.4, an Option may be exercised to
purchase any number of Shares up to the number of Vested Unissued Option Shares
at any time after the Grant Date up to 5:00 pm local time on the Expiry Date and
shall not be exercisable thereafter. 

4.2 Manner of Exercise

The Option shall be exercisable by delivering to the Company a
notice specifying the number of Shares in respect of which the Option is
exercised together with payment in full of the Option Price for each such Share.
Upon notice and payment there will be a binding contract for the issue of the
Shares in respect of which the Option is exercised, upon and subject to the
provisions of the Plan. Delivery of the optionee's cheque payable to the Company
in the amount of the Option Price shall constitute payment of the Option Price
unless the cheque is not honoured upon presentation in which case the Option
shall not have been validly exercised.

4.3 Vesting of Option Shares

The Board, subject to the policies of the Exchange, may
determine and impose terms upon which each Option shall become vested in respect
of Option Shares. Current policies of the TSX Venture Exchange provide that:


(a) the TSX Venture Exchange will not normally accept plans
which permit vesting over a period of less than 18 months or that vesting
schedules which permit a majority of the shares to be released early in that
vesting period rather than equally on a quarterly basis; and

(b) options issued to Consultants engaged in Investor Relations
Activities must vest in stages over a period of 12 months with no more than 1/4
of the Options vesting in any three month period;

(c) and such policies are hereby adopted by the Board to remain
in effect until amended or repealed.




4.4 Termination of Employment

If the Optionee ceases to be a Director, Employer or Consultant
of the Company or one of the Company's subsidiaries, his or her Options shall be
exercisable as follows:

(a) Death or Disability

(i) If the Optionee ceases to be a Director, Employer or
Consultant of the Company or a subsidiary of the Company, due to his or her
death or Disability or, in the case of an Optionee that is a company, the death
or Disability of the person who provides services to the Company or a subsidiary
of the Company, the Option then held by the Optionee shall be exercisable to
acquire Vested Unissued Option Shares at any time up to but not after the
earlier of;

(ii) 365 days after the date of death or Disability; and

(iii) the Expiry Date; 

(b) Termination for Cause

If the Optionee ceases to be a Director, Employer or Consultant
of the Company or one of the Company's subsidiaries as a result of termination
for cause, as that term is interpreted by the courts of the jurisdiction in
which the Optionee is employed or engaged, or in the case of an Optionee that is
a corporation wholly owned by an individual who is a Director, Employee or
Consultant and such individual ceases to be a Director, Employee or Consultant
as a result of termination for cause as such term is interpreted in the courts
of the jurisdiction in which such individual is employed or engaged, any
outstanding Option held by such Optionee on the date of such termination,
whether in respect of Option Shares that are Vested or not, shall be canceled as
of that date.

(c) Early Retirement, Voluntary Resignation or Termination
Other than For Cause

If the Optionee or, in the case of an Option granted to an
Optionee which is a company wholly-owned by an individual, ceases to be a
Director, Employee or Consultant, such individual ceases to be a Director,
Employee or Consultant of the Company or a subsidiary of the Company due to his
or her retirement at the request of his or her employer earlier than the normal
retirement date under the Company's retirement policy then in force, or due to
his or her termination by the Company or a subsidiary of the Company other than
for cause, or due to his or her voluntary resignation, the Option then held by
the Optionee shall be exercisable to acquire Vested Unissued Option Shares at
any time up to but not after the earlier the Expiry Date and the date which is
90 days (30 days if the Optionee was engaged in Investor Relations Activities)
after the Optionee or, in the case of an Option granted to an Optionee which a
corporation wholly-owned by an individual who is a Director, Employee or
Consultant, such individual, ceases to be a Director, Employee or Consultant of
the Company or a subsidiary of the Company.




For greater certainty, an Option that has not become Vested in
respect of certain Unissued Option Shares at the time that the relevant event
referred to in this section 4.4 occurred, shall not be or become exercisable in
respect of such Unissued Option Shares and shall be canceled.

4.5 Effect of a Take-Over Bid 

If a bona fide offer (an "Offer") for Shares is made to
the Optionee or to shareholders of the Company generally or to a class of
shareholders which includes the Optionee, which Offer, if accepted in whole or
in part, would result in the offeror becoming a control person of the Company,
within the meaning of subsection 1(1) (or more particularly, as described in
paragraph (c) under the definition of "distribution") of the Securities
Act, the Company shall, immediately upon receipt of notice of the Offer,
notify each Optionee of full particulars of the Offer, whereupon all Option
Shares belonging to the class of shares subject to such Offer will become Vested
and the Option may be exercised in whole or in part by the Optionee so as to
permit the Optionee to tender the Option Shares received upon such exercise,
pursuant to the Offer.

However, if:

(a) the Offer is not completed within the time specified
therein; or

(b) all of the Option Shares tendered by the Optionee pursuant
to the Offer are not taken up or paid for by the offeror in respect thereof,
then the Option Shares received upon such exercise, or in the case of subsection
(b) above, the Option Shares that are not taken up and paid for, may be returned
by the Optionee to the Company and reinstated as authorized but unissued Shares
and with respect to such returned Option Shares, the Option shall be reinstated
as if it had not been exercised and the terms upon which such Option Shares were
to become Vested pursuant to section 4.3 shall be reinstated. If any Option
shares are returned to the Company under this section 4.5, the Company shall
immediately refund the exercise price to the Optionee for such Option
Shares.

4.6 Acceleration of Expiry Date

If at any time when an Option granted under the Plan remains
unexercised with respect to any Unissued Option Shares, an Offer is made by an
offeror, the Board may, upon notifying each Optionee of full particulars of the
Offer, declare all Options granted under the Plan to be Vested, and declare the
Expiry Date for the exercise of all unexercised Options granted under the Plan
to be accelerated so that all Options will either be exercised or will expire
prior to the date upon which Shares must be tendered pursuant to the Offer.

4.7 Effect of a Change of Control 

If a Change of Control occurs, all Option Shares subject to
each outstanding Option will become vested, whereupon such Option may be
exercised in whole or in part by the Optionee.




4.8 Exclusion from Severance Allowance, Retirement Allowance
or Termination Settlement 

If the Optionee, or, in the case of an Option granted to an
Optionee which is a company wholly-owned by an individual who is a Director,
Employee or Consultant, such individual, retire, resigns or is terminated from
employment or engagement with the Company or any subsidiary of the Company, the
loss or limitation, if any, pursuant to the Option Agreement with respect to the
right to purchase Option Shares which were not Vested at the time or which, if
Vested, were cancelled, shall not give rise to any right to damages and shall
not be included in the calculation or nor form any part of any severance
allowance, retiring allowance or termination settlement of any kind whatsoever
in respect of such Optionee.

4.9 Shares Not Acquired 

Any Unissued Option Shares not acquired by an Optionee under an
Option which has expired may be made the subject of a further Option pursuant to
the provisions of the Plan. 

5. ADJUSTMENT OF OPTION PRICE AND NUMBER OF OPTION SHARES


5.1 Share Reorganization 

Whenever the Company issues Shares to all or substantially all
holders of Shares by way of a stock dividend or other distribution, or
subdivides all outstanding Shares into a greater number of Shares, or combines
or consolidates all outstanding Shares into a lessor number of Shares (each of
such events being herein called a "Share Reorganization") then effective
immediately after the record date for such dividend or other distribution or the
effective date of such subdivision, combination or consolidation, for each
Option: (a) the Option Price will be adjusted to a price per Share which is the
product of: (i) the Option Price in effect immediately before that effective
date or record date; and (ii) fraction, the numerator of which is the total
number of Shares outstanding on that effective date or record date before giving
effect to the Share Reorganization, and the denominator of which is the total
number of Shares that are or would be outstanding immediately after such
effective date or record date after giving effect to the Share Reorganization;
and

(b) the number of Unissued Option Shares will be adjusted by
multiplying (i) the number of Unissued Option Shares immediately before such
effective date or record date by (ii) a fraction which is the reciprocal of the
fraction described in subsection (a)(ii).

5.2 Special Distribution 

Subject to the prior approval of the Exchange, whenever the
Company issues by way of a dividend or otherwise distributes to all or
substantially all holders of Shares;




(a) shares of the Company, other than the Shares; 

(b) evidence of indebtedness;

(c) any cash or other assets, excluding cash dividends (other
than cash dividends which the Board has determined to be outside the normal
course); or 

(d) rights, options or warrants; then to the extent that such
dividend or distribution does not constitute a Share Reorganization (any of such
non-excluded events being herein called a "Special Distribution"), and effective
immediately after the record date at which holders of shares are determined for
purposes of the Special Distribution, for each Option the Option Price will be
reduced, and the number of Unissued Options Shares will be correspondingly
increased, by such amount, if any, as is determined by the Board in its sole and
unfettered discretion to be appropriate in order to properly reflect any
diminution in value of the Option Shares as a result of such Special
Distribution.

5.3 Corporate Organization 

Whenever there is:

(a) a reclassification of outstanding Shares, a change of
Shares into other shares or securities, or any other capital reorganization of
the Company, other than as described in sections 5.1 or 5.2; 

(b) a consolidation, arrangement, merger or amalgamation of the
Company with or into another company resulting in a reclassification of
outstanding Shares into other shares or securities or a change of Shares into
other shares or securities; or 

(c) a transaction whereby all or substantially all of the
Company's undertaking and assets become the property of another corporation;
(any such event being herein called a "Company Reorganization") the Optionee
will have an option to purchase (at the times, for the consideration, and
subject to the terms and conditions set out in the Plan) and will accept on the
exercise of such option, in lieu of the Unissued Option shares which the
Optionee would otherwise have been entitled to purchase, the kind and amount of
shares or other securities or property that the Option would have been entitled
to receive as a result of the Company Reorganization if, on the effective date
thereof, the Optionee has been the holder of all Unissued Options Shares or if
appropriate, as otherwise determined by the Board.

5.4 Determination of Option Price and Number of Unissued
Option Shares 

If any questions arise at any time with respect to the Option
Price or number of Unissued Option shares deliverable upon exercise of an Option
following a Share Reorganization, Special Distribution or Company
Reorganization, such questions shall be conclusively determined by the Company's
auditor, or, if such auditor declines to so act, any other firm of chartered
accountants in Canada that the Board may designate and who will have access to
all appropriate records and such determination will be binding upon
the Company and all Optionees.





5.5 Regulatory Approval 

Any adjustment to the Option Price or the number of Unissued
Option shares or other securities purchasable under the Plan pursuant to the
operations of any one of sections 5.1, 5.2 or 5.3 is subject to any required
approval of exchange and of any securities regulatory or other governmental
authority having jurisdiction. 

6. MISCELLANEOUS 

6.1 Right to Employment 

Neither this Plan nor any of the provisions hereof shall confer
upon any Optionee any right with respect to employment or continued employment
with the Company or any subsidiary of the Company or interfere in any way with
the right of the Company or any subsidiary or other governmental authority
having jurisdiction.

6.2 Necessary Approvals 

This Plan shall be effective only upon the approval of the
shareholders of the Company given by way of an ordinary resolution. Any Options
granted under this Plan prior to such approval may only be exercised upon the
receipt of such approval. The obligation of the Company to sell and deliver
Shares in accordance with the Plan is subject to any required approval of the
Exchange and any securities regulatory or other governmental authority having
jurisdiction. If any Shares cannot be issued to any Optionee for any reason,
including, without limitation, the failure to obtain such approval, then the
obligation of the Company to issue such Shares shall terminate and an Option
Price paid by an Optionee to the Company shall be immediately refunded to the
Optionee by the Company.

6.3 Administration of the Plan 

The Board shall, without limitations, have full and final
authority in its discretion, but subject to the express provisions of the Plan,
to interpret the Plan, to prescribe, amend and rescind rules and regulations
relating to the Plan and to make all other determinations deemed necessary or
advisable in respect of the Plan. Except as set forth in section 5.4, the
interpretation and construction of any provision of the Plan by the Board shall
be final and conclusive. Administration of the Plan shall be the responsibility
of the appropriate officers of the Company and all costs in respect thereof
shall be paid by the Company.




6.4 Income Taxes 

As a condition of and prior to participation in the Plan, any
Optionee shall on request authorize the Company in writing to withhold from any
remuneration otherwise payable to such Optionee any amounts required by any
taxing authority to be withheld for taxes of any kind as a consequence of the
Optionee's participation in the Plan.

6.5 Amendments to the Plan 

The Board may from time to time, subject to applicable law and
to the prior approval, if required, of the Exchange or any other regulatory body
having authority over the Company of the Plan, suspend, terminate or discontinue
the plan at any time, or amend or revise the terms of the Plan or of any Option
granted under the Plan, provided that no such amendment, revision, suspension,
termination or discontinuance shall in any manner adversely affect any Option
previously granted to an Optionee under the Plan without the consent of that
Optionee, and, that disinterested shareholder approval (within the meaning of
the policies of the Toronto Stock Exchange) will be obtained for any reduction
in the exercise price if the Optionee is an Insider at the time of the proposed
amendment.

6.6 Disinterested Shareholder Approval 

The Company shall obtain disinterested shareholder approval
(within the meaning of the policies of the Toronto Stock Exchange) of Options
if:

(a) the Plan, together with all of the Company's previously
established proposed stock option grants, could result at any time in; 

(i) the number of Shares reserved for issuance pursuant to
stock options granted to Insiders exceeds 10% of the outstanding Shares; 

(ii) the issuance to Insiders, within a one year period, of a
number of Shares exceeds 10% of the outstanding Shares; or 

(iii) the issuance to any one Insider and such Insider's
Associates, within a one year period, of a number of Shares exceeds 5% of the
outstanding Shares or

(b) the Company is decreasing the exercise price of Option
previously granted to Insiders.

6.7 Form of Notice 

A notice given to the Company shall be in writing, signed by
the Optionee and delivered to the head business office of the Company.




6.8 No Representation or Warranty as to Value 

The Company makes no representation or warranty as to the
future market value of any Shares issued in accordance with the provisions of
the Plan.

6.9 Representation or Warranty as to Bona Fides 

For Options granted to Employees, Consultants and Management
Company Employees, the Company will represent to the Exchange that the Optionee
is a bona fide Employee, Consultant or Management Company Employee, as the case
may be, of the Company or one of its subsidiaries.

6.10 Compliance with Applicable Law 

If any provision of the Plan contravenes any law or any order,
policy, by-law or regulation of any regulatory body or Exchange having authority
over the Company or the Plan, then such provision shall be deemed to be amended
to the extent required to bring such provision into compliance therewith.

6.11 No Assignment 

No Optionee may assign any of his or her rights under the
Plan.

6.12 Rights of Optionees 

An Optionee shall have no rights whatsoever as a shareholder of
the Company in respect of any of the Unissued Option shares (including, without
limitation, voting rights or any right to receive dividends, warrants or rights
under any right offering).

6.13 Governing Law 

The Plan shall be governed by laws of the province of
Ontario.

6.14 Time of Essence 

Time is of the essence of this Plan. No extension of time will
be deemed to be or to operate as a waiver of the essentially of time.

6.15 Entire Agreement 

This Plan sets out the entire agreement between the Company and
the Optionees relative to the subject matter hereof and supersedes all prior
agreements, undertakings and understandings, whether oral or written.